Area auto industry continues as bright spot

12/31/2012

BY TYREL LINKHORNBLADE BUSINESS WRITER

Tim Randolph demonstrates a simulator during a tour of Jeep. The Toledo automaker also was thrown into the 012 presidential race.

A widespread drought, ongoing investment and hiring at the Jeep plant, and the loss of a sponge cake that's as much an American icon as it is a snack food were among the stories that dominated Toledo's business headlines in 2012.

There were positive signs in 2012 that the region continues to recover from the recession. The jobless rate in Lucas County fell from 9.4 percent in January to 7.4 percent in November. Toledo's unemployment rate also fell considerably through the year, from 10 percent in January to 8 percent in November. Through the year, the refrain from economists was consistent: there's a recovery, but it's a slow one.

The auto industry continued to be a bright spot for Toledo in 2012. As it previously promised, Chrysler Group LLC started pouring what will be hundreds of millions of dollars into the Toledo Assembly Complex this summer as it revamps part of the plant to build an all-new Jeep. The automaker also begun the hiring process for the 1,105 jobs necessary for a new shift to be added soon after the vehicle’s launch. Chrysler didn’t have any trouble finding applicants, gathering some 10,000 in just 36 hours.

The plant stopped building the Jeep Liberty in August, but continues cranking out Jeep Wranglers at a breakneck pace. Through November, Chrysler has set monthly sales records for the Wrangler in eight of the last 11 months, including an all-time sales record in June.

Business gets political

Jeep also unwittingly became a major talking point in the 2012 presidential race. U.S. automakers had already found themselves in the political arena with discussions of the bailout. But Jeep was really thrown into the mix when Republican candidate Mitt Romney picked up on what proved to be an inaccurate representation of reports that Chrysler was planning to move U.S. Jeep production to China.

Mr. Romney continued using a variation of the claim for the remainder of the election, in spite of Chrysler’s chief executive saying in no uncertain terms that Jeep production would stay in the United States.

And Jeep wasn’t the only local company to be dragged into the presidential election fracas. When one of Mr. Romney’s advisers compared his campaign strategy direction to an Etch A Sketch, President Obama’s campaign picked up the reference and ran with it. The inference for Obama's team was the Mr. Romney would say whatever he needed, whether be believed it or not, to get elected. The word choice may have given a temporary drag to Mr. Romney's campaign, but for Bryan-based Ohio Art, the references turned into a fun marketing campaign and helped them get a temporary but sizable sales boost. The company released two limited-edition "Draw Your Own Conclusions" Etch A Sketch models cast in red or blue.

Area hit hard by drought

A near-perfect early planting season had many farmers well ahead of schedule to start the year.

Stalks of corn along North Fostoria Road near Woodville, Ohio wilted in the intense summer heat as the area joined the rest of the nation in a drought.

"I finished with corn on May 5," Wood County farmer Gordon Wenig told The Blade in mid-May. "I think the only year we've been finished earlier was the drought year of '88. And that year it never rained.”

At that time, Mr. Wenig couldn’t know how darkly foreshadowing that statement was.

The mild spring gave way to an exceptionally dry and hot summer that baked farmland across the United States. By early July, more than half of Ohio was under some level of drought. Climatologists said the drought was the most widespread since 1956.

Areas west of Toledo approaching the Indiana border were hit particularly hard, with some fields in Fulton and Defiance counties producing just a third or half the corn they did last year.

Long-time running stores close

Changing shopping patterns and a still-slow economy claimed several long-operating stores this year.

In February, Fleeger's Pro Hardware on Byrne Road in South Toledo closed its doors after more than 65 years in business. Owner Laura Fleeger-Koenig blamed the decision on a still weak economy and even weaker housing market. She also said increased competition from national hardware chains had hurt the small store.

The poor economy also shut down Kazmaier's 5-Star Market in Toledo. The store’s owner said the 32-year-old store had struggled since the recession. He announced in April he would close.

In late August, Churchill's Super Market, another store that had served Toledo for more than six decades, announced the property had been sold and the store would be closing soon. Store president Bob Colwell said the sale was forced by a tax issue brought on by a 2000 sale of other properties to a company that later went bankrupt.

The death of the Woodville Mall led The Andersons Inc. to announce plans to close its 120,000-square-foot general store there in early 2013. The store has been a mall tenant since 1988.

There was good news on the retail front. Michigan-based Art Van Furniture and New York-based Shoppers World announced plans for their first Toledo-area stores. Chick-fil-A opened its first two stand-alone stores in the area, and CVS Pharmacy made plans to return to the market with as many as six locations.

Keeping headquarters here

Downtown Toledo got good news in 2012 that one of the major businesses headquartered there was staying put. Libbey Inc. signed a new lease in August to remain in downtown for an additional 15 years. Libbey, headquartered in Toledo for nearly 125 years, also signed new leases to keep its showroom downtown and its factory outlet store in the Erie Street Market.

Downtown also added a new tenant. Hickory Farms Inc. relocated its headquarters to the Hylant Building downtown in August after spending the last 40 years in Maumee.

Monroe-based furniture maker La-Z-Boy said it was toying with the idea of relocating its headquarters before securing a $3.7 million incentive package to go toward a new $50 million headquarters in Monroe. If all goes as planned, construction is to start next spring and take approximately two years.

Death of the Twinkie

Motorists traveling I-75 through Northwood no longer will be treated to the smell of freshly baked bread, as the Hostess plant there closed following a nationwide labor dispute that ultimately sent the company into liquidation.

Robert Misamore stands at what is left of the picket line at the Hostess plant in Northwood. The Irving, Texas, company said a nationwide strike crippled its ability to make and deliver its products. The firm went into liquidation, and 250 local workers were among those who lost their jobs.

In its second trip to bankruptcy court in less than a decade, Hostess Brands Inc. sought concessions from its second-largest union, which then went on strike. Last month the company followed through on threats to permanently shut all its plants if enough workers didn’t stop striking and come back to work. That meant the end -- at least temporarily -- for Twinkies, Ding Dongs, Ho-Hos, and Wonder Bread, the last of which was baked in Northwood.

Some 250 local employees in northwest Ohio lost their jobs when Hostess closed down.

Lockout ended

Another area labor dispute had a more amicable end. Going into 2012, employees at Cooper Tire & Rubber Co. in Findlay had been locked out of the tire plant there for five weeks after rejecting what the company called its last best contract offer. The lockout lasted another eight weeks, but workers and management finally were able to agree on a deal in late February. Cooper has posted strong results this year, including record sales of more than $1.1 billion in the third quarter.

Solar industry

In the local solar industry, there was good news and bad news. Isofoton North America completed a $30 million plant in Napoleon, which was named "America's Number One Solar Small Town" by an industry trade group. Toledo-based Xunlight Corp. sold its Chinese holdings as part of its plan to streamline its operations. But two local companies, Willard & Kelsey and Buckeye Silicon defaulted on state loans and faced uncertain futures.

Michigan curtails union power

Late this year Republican legislators in Michigan rapidly pushed through new rules that prohibit unions from forcing members to join or pay union dues. Gov. Rick Snyder signed the measures into law. Proponents of the law say it will make Michigan’s economy more competitive, but union members and other opponents say it is an attack aimed at weakening unions and will only serve to bring down wages and hurt the middle class. The vote drew an estimated 10,000 protestors to the Michigan State Capitol.

Big money for the Roller Coast

Cedar Point’s parent company made plans this year for big investments at the Sandusky resort and amusement park. First up is a $26 million rollercoaster that will allow riders' feet to dangle and give them the sensation of flying. Dubbed GateKeeper, the 67-mph coaster is expected to start running in May. It will be the park’s 17th coaster and second-longest at 4,164 feet. Cedar Fair LP also plans to invest $60 million into its three Cedar Point hotel properties over the next three years. Chief executive Matt Ouimet told The Blade he sees opportunity to lure more visitors to make their trips to Cedar Point a getaway rather than a one-day trip.

City continues wooing Chinese

Toledo continued to chase Chinese investment in 2012, with Mayor Mike Bell making his fourth trip to China in November. Mr. Bell’s trip included a pitch at the China Hi-Tech Fair in Shenzhen, which was attended by 2,500 investors. The mayor was accompanied by about 20 local businessmen. Toledo also hosted a large international economic development conference in September. The 5 Lakes Global Economic Forum, hosted by the Regional Growth Partnership and local consulting group 5 Lakes Global Ltd., drew about 160 businessmen, educators, and officials. Organizers said it was a chance to sell the area to Chinese investors, and they were optimistic about its potential results.

Tony Packo's sold

Though a $5.5 million deal to sell Tony Packo's Inc. restaurant chain to Toledo businessman Bob Bennett appeared to fall apart just after the first of the year over concerns about a bank's involvement, Mr. Bennett and the court-appointed receiver in charge of the 80-year-old hot dog chain were able to get the deal back on track by late January. Mr. Bennett closed on the purchase in in February, promising patrons the recipes that made Packo's famous wouldn't change.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.

Copyright 2015 The Blade. All rights reserved. This material may not be copied or distributed without permission.